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Buy Surya Roshni; target of Rs 183: Angel Broking

Angel Broking is bullish on Surya Roshni and has recommended Buy rating on the stock with a target of Rs 183 in its research report dated August 17, 2015.

August 21, 2015 / 12:53 PM IST
 
 
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Angel Broking's report on Surya RoshniSurya Roshni’s top-line for 1QFY2016 improved by 8.8% yoy to `731cr, which is slightly higher than our estimate of `712cr. The Lighting business posted a robust growth of 22.4% on a yoy basis to `318cr while the Steel business reported flat revenues for the quarter, ie of `466cr, at the gross level. The EBITDA margin contracted by 65bp yoy to 7.6%. The interest expense for the quarter declined by 14.3% yoy to `25cr, while the depreciation expense rose 9.2% yoy to `15cr. Other income remained flat on a yoy basis. Consequently, the net profit increased by 5.3% yoy for the quarter to `12cr (vis-à-vis our expectation of `15cr).Outlook and Valuation: With higher contribution from the Lighting business and entry into newer businesses, we expect the company to post a CAGR of 6.2% in the top-line over FY2015E-17E to `3,223cr. The EBITDA margin is estimated to improve from 7.8% in FY2015 to 8.5% in FY2017. Consequently, the ne t profit is expected to post a CAGR of 21.6% over FY2015E-17 to `80cr. At the current market price, the stock is trading at 7.6x its FY2017E earnings. We maintain our Buy rating on the company and revise our target price to `183, based on a target PE of 10.0x for FY2017E, says Angel Broking research report.For all recommendations,  click here  Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

first published: Aug 20, 2015 04:23 pm

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